Choosing the Best ERP: NetSuite vs Microsoft Dynamics 365

If you have been doing any research into choosing the best ERP for your business, it is likely you’ve seen the benefits of cloud enterprise software. Chances are that you have also come across both NetSuite and the Microsoft Dynamics 365 suite as cloud ERP options. However, while both do have cloud functionality, both are not a true Software-as-a-Service (SaaS) hosted model.

Cloud computing provides several benefits when applied to ERP software, including scalability for business size and functionality as well as flexibility in deployment. This has led to many enterprise products being labeled as cloud software without actually featuring a SaaS model – such as the Microsoft Dynamics line. The Microsoft Dynamics 365 ERP module is a reconfigured platform cultivated from a variety of hybrid cloud legacy systems, while NetSuite is a native cloud application built from the ground up as a true cloud software product.

History

Many of the most popular mid-market ERP solutions have been built from other software applications and legacy systems, which can affect their current functionality. If the vendor has not ensured that all of the older and modern integrations work seamlessly within the same platform, then this will hamper your solution’s effectiveness. Choosing the best ERP requires you to investigate the product’s history as well that of the vendor to determine whether they can provide a modern solution designed for your needs.

Microsoft Dynamics 365 is the culmination of several redesigns and rebranding of legacy on-premise and hybrid cloud software systems joined into a single platform. The Microsoft Dynamics AX and NAV solutions were traditional ERP products that were combined with these other applications to produce the current Microsoft Dynamics 365 line. The result of these combinations is a final product that can become broken with too much customization, as the entire platform is a host of separate systems.

NetSuite was built from the ground up as a SaaS system and has retained the same core financial functionality since its inception as NetLedger. Within the past 20 years it has evolved into a more comprehensive business management solution built on top of the original accounting features instead of combining isolated applications. Most importantly, it remains the same software that was built in the cloud, with the only changes being updates for modern functionality.

Cloud ERP

Cloud ERP software provides several benefits over on-premise solutions, though there are some variations depending on the cloud-based model you implement. SaaS is considered “true” cloud software, but there exist multiple alternatives to adopting a solely publicly hosted solution. Cloud ERP may be implemented in privately hosted or hybrid deployments as well, however, capturing the most value out of your cloud migration requires knowing which model will work best for your needs.

Being an assembly of legacy ERP solutions, Microsoft Dynamics 365 had to be reconfigured for modern cloud functionality. As it is not a native SaaS solution, it exists only in a single-tenancy model, which means that it exists in one privately hosted database. Single-tenant environments require individual updates and customization, so even though Dynamics 365 does feature real-time connectivity, it does not deliver the complete cost advantages of migrating to the cloud.

In contrast, NetSuite is a native multi-tenant platform that includes a more cost-effective infrastructure and easier real-time configuration. While multi-tenancy creates a shared database, all data exists solely within its own organizational space and is invisible to users outside of your network. This model also allows for faster data access, upgrade delivery and adoption of new technology for your cloud ERP system.

Scalability

The primary value proposition for migrating to cloud ERP is the inherent flexibility of SaaS deployments, which do not feature many of the same requirements as traditional enterprise software implementations. Without the need for a physical server or other hardware onsite, cloud solutions offer leaner installation methodologies that enable a potentially lower total cost of ownership (TCO) for your system. It also makes it easier to implement portions of the software at scale so that the level of functionality delivered matches your business’s size.

As Microsoft Dynamics 365 encompasses an entire product line, it features multiple products meant to address various stages of vertical functionality. However, even the smaller module designed for the SMB market is complex compared to the legacy solutions on which it is based and can be costly for users of those applications to migrate to. The extensive features of the Dynamics 365 family, combined with the existing code from the legacy software they are built on top of, decrease their scalability compared to native SaaS systems.

NetSuite’s “born in the cloud” design lends greatly to ensuring scalability for multiple stages and circumstances, as its architecture was built from the beginning to be modular. A native SaaS platform enables the implementation team to allocate and divert resources as needed during deployment to address emerging demands as needed. As opposed to the improvised virtualization use within reconfigured legacy systems, native cloud solutions such as NetSuiteallow software infrastructure to be adopted at scale consistently so that updates do not inflict downtime.

Integration

All mid-market ERP platforms must be able to provide multirole functionality to deliver true ROI post-implementation. Several products feature multiple native modules as well as the ability to integrate seamlessly with external applications for individual processes. The ability to successfully incorporate additional solutions within a cloud system depends on the nature of that software, i.e. whether it is a reconfigured legacy application and the extent it has been modified for Internet-facing functionality.

Microsoft Dynamics 365 was built from a host of historically on-premise systems, so has had to be customized extensively for modern cloud capabilities. These separate applications are kept together by middleware which allows what are effectively still traditional solutions to be hosted in a single-tenant environment on Microsoft Azure. This means that making any additional modifications, including integrating add-on modules, requires more work than in a native cloud platform.

NetSuite is specifically designed to be able to incorporate outside adjustments made by experienced developers, with redundant systems built in to prevent upgrades shutting down the system. NetSuite partners such as SWK Technologies provide the knowledge needed to customize your SaaS deployment to tailor it to your business’s unique demands. SWK features a dedicated NetSuite team with approximately 30 years of combined history in managing NetSuite implementations and development that can leverage this firsthand expertise in ensuring your solution delivers the best ROI.

NetSuite vs Microsoft – Which is the Best Cloud ERP?

NetSuite and Microsoft Dynamics 365 both deliver notable value points through enterprise functionality; however, only one provide the full benefit of leveraging cloud ERP software. While Dynamics 365 is reconfigured legacy platform, NetSuite is a true cloud-native solution that features better scalability and cost-effectiveness in implementation.

Read our case study on how an electronics distributor was able to improve their margins by implementing NetSuite to see how this solution delivers value to wholesale distribution businesses.